German pork supply and demand both falling

The latest half-year figures from Eurostat record a 4% (-99,000 tonnes) year-on-year decline in German pork production, totalling 2.58 million tonnes. Both domestic consumption and export volumes have also been falling.

According to national household panel figures, pork retail sales fell by 8% year-on-year between January and July 2019. A late start to the barbeque season, followed by strong heat, probably limited meat demand. Pork/beef mince and sausage sales also declined, by 3.5% and 3% respectively.

Statistics Germany also report a 2% year-on-year decline in pig meat exports (including offal), to 1.29 million tonnes. This is the lowest half-yearly figure since 2012. When offal is excluded, the decline is even larger, at 4%.

The fall in exports reflects lower requirements from several EU markets, notably Italy, the Netherlands and Poland. EU pork prices have risen sharply, driven by increasing Asian demand. Shipments to China were nearly 30% higher than last year. However, the rising prices have probably dampened demand within the EU. Average export prices were 4% higher than in 2018.

With demand falling alongside production, German pig meat and offal imports also weakened in the first half of this year. At 560,000 tonnes, volumes were 4% lower than last year. This was primarily due to a 12% decline from Denmark, the primary supplier.

Altogether, it is interesting to note that supply availability on the German market doesn’t seem to have fallen by as much as retail demand this year. This could suggest that demand is holding up better in other areas, for example, foodservice. Alternatively, pork could be entering storage, though this seems unlikely, and would be unusual given the elevated price level.